books

A Tractable Analysis of Contagious Equilibria

Journal of Mathematical Economics, Vol. 50, pp. 290–300

Authors:
Gabriele Camera,
Alessandro Gioffré
Research Area:
Macro and Finance
Date:
Jan 2015
Keywords:
Cooperation, Social norms, Grim trigger, Random matching
Abstract:

This paper studies contagious equilibrium in infinitely repeated matching games. The innovation is to identify a key statistic of contagious punishment that, used together with a recursive formulation, generates tractable closed-form expressions for continuation payoffs, off equilibrium. This allows a transparent characterization of the dynamic incentives created by contagious punishment schemes.

Link to Publication

Back to list